To Arbitrate or Not! Attorney Romel Ambarchyan provides an in-debt look at the Arbitration of Disputes provision in the California Residential Listing Agreement

Jul 18, 2013, 07:21 ET from RA & Associates

GLENDALE, Calif., July 18, 2013 /PRNewswire/ -- In the past few decades, arbitration has become a common mainstay in resolving legal disputes. This is no more evident, than in the context of the relationship between real estate brokers and sellers. But is arbitration right for you as a real estate broker?  The resounding answer (according to real estate attorney Romel Ambarchyan) is yes!

Many real estate brokers typically initial and also recommend that their clients initial the "Arbitration of Disputes" provision of the C.A.R. Residential Listing Agreement without ever knowing what the ramifications of this provision are. Without delving into the myriad list of "pros", I will address a few benefits that apply to real estate brokers, in particular. 

Brokers are held to a higher standard in litigation: There are thousands of appellate cases involving claims against real estate brokers and it is fair to assume that there is a bias against the real estate broker in the law when there is a dispute with the broker's principle. The bias is predominately based on the fact that courts typically impose a higher duty as a "fiduciary" on the broker, as opposed to basing the duty of care on "custom and usage in the marketplace" (lower standard), which typically applies in the case of an arbitration hearing.

The outcome may be determined by someone with no experience with the subject matter: In the context of a litigation case, the final determination of the merits of the case typically rests with either the judge or jury. The fact that neither the jury or the judge may have any knowledge or experience with the subject matter is concerning for a broker, as a juror with no knowledge of the subject matter will tend to be persuaded more by an emotional argument of a litigant as opposed to the substantive law.  In contrast, an arbitrator will have experience in the subject matter of the dispute.   

Litigation is costly: Typically speaking, litigation will be more costly than arbitration. This is an important aspect that a broker should consider, as the cost of fighting it out with a seller, could potentially outweigh the benefit of litigating a matter. 

According to Romel Ambarchyan, there are several other "pros" to arbitration. However, the above factors typically play a considerable role in the context of the broker-seller relationship. 

For more information on the Arbitration of Dispute clauses, call Romel Ambarchyan at RA & Associates, APC at (818) 230-3220.

About Romel Ambarchyan
Romel Ambarchyan is a California attorney who specializes in real estate transactions and litigation. You can learn more about him by visiting

SOURCE RA & Associates